When will the various health care reform provisions take effect?
Download our summary of health care reform law effective dates.
Congress completes healthcare reform effort
Congress has completed sweeping healthcare reform legislation with hundreds of billions of dollars in tax changes. Congress moved the reform legislation in two packages. The first bill (H.R. 3590) was signed into law by the president on March 23 and the second “corrections” bill (H.R. 4872) is expected to be signed shortly.
The legislation will affect nearly every individual and business. Individuals will be required to obtain health insurance or face a penalty (unless their income is below the tax filing threshold). Many businesses will also face potentially stiff penalties if they fail to offer adequate coverage and any of their employees receive new government subsidies for healthcare.
Additionally, the legislation contains a slew of revenue raising tax provisions and fees aimed at both businesses and individuals, only some of which relate to healthcare. Some of the most significant new tax provisions include:
- an expansion of Form 1099 information reporting to include payments for property and payments to corporations;
- a new 3.8 percent Medicare tax on investments income for taxpayers with AGI over $200,000 ($250,000 for joint filers);
- a 2.3 percent excise tax on medical devices sales;
- an excise tax on high-cost health plans; and
- new annual fees on the health insurance and drug industries that will be levied according to market share.
The principal provisions in the enacted legislation dealing with mandatory coverage are generally effective in 2014. However, a number of the tax provisions have earlier effective dates.
The chart in our Tax Legislative Update details the combined effect of the tax provisions in the two bills.
